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Certificate of Liability insurance
First-party liability is what you're responsible for in your own business. In the context of data breaches, you have first-party liability when a data breach targets your data, exposing the records of your clients or customers. Most small IT businesses
have so few clients that they don't have much first-party exposure.
Your clients, however, most likely have greater first-party liability exposures. To manage those exposures, they can purchase first-party Cyber Liability Insurance.
Benefits from this type of coverage typically pay for the costs associated with a breach to their customer data, including…
If your clients don't have Cyber Liability coverage, however, they won't receive compensation from an insurance provider after a data breach. Instead, they'll have to cover the associated costs out of their own assets. To make up for having
to pay all that money, they may sue any parties they think are responsible for causing or failing to prevent the breach – and if you provided IT services for them, that list could include your business.
Next: What Is Third-Party Liability?